In the past few weeks, the dark veil of recession has shown signs of lifting. France, Germany and,more recently, China have seen their economies enjoy a sufficiently sustained period of growth, albeit negligible, that has lasted long enough for economists to declare them officially “out of recession”.
Closer to home, mortgage lending is on the rise again at long last and even house builders, among
the worst hit by first blows of the credit crunch onslaught, are reporting a slight upturn.
Together with some more positive news about consumer spending, these statistics have brought a slight flush to the cheeks of the lifeless corpse that is the world economy.
But we’re not out of the woods yet. In fact, I am concerned that even when we do crawl out of the recessionary chasm that swallowed us some 12 months ago, the struggle is far from over for the demolition industry.
The first hurdle the industry is likely to encounter is a hangover of thinner margins. Main
contractors and developers have “enjoyed” a period of intense competition among demolition
contractors which has led to some near-suicidal pricing practices. Having grown familiar with that level of cost, these developers and contractors are not suddenly going to accept a post-recession price hike. Indeed, I would personally be amazed if the “value engineering” built into virtually every contract these days does not continue long after we’ve shaken the recessionary monkey off our collective backs.
The second and, perhaps, bigger challenge is in planning. With the notable exception of certain
Government-funded departments, new build and its associated planning has all but dried up in
recent months. Even when the supposedly wise heads in Government sound the “alert over” sirens and the world returns to some semblance of normality, demolition contractors will find their workload wedged behind a logjam of planning applications held over from the dark days.
Both of these problems are beyond our control and, as usual, we will just have to make the best of a bad job. We’ll have to do the same with equipment fleet renewals, expansions and maintenance programmes that have been undermined by the current recession.
Governments around the world have climbed aboard the stimulus package bandwagon, injecting
trillions of tax dollars into comatose economies; but that has failed to change the attitude of most
banks and finance houses that would still rather see those dollars on their own bottom lines than on ours. As a result, even those demolition companies that have managed to maintain a good
workload through the recession have found themselves blocked at every turn when they set out to buy new or replacement equipment.
And can we all, hand on heart, say that we’ve invested as much on machine maintenance during the recession as we might have during a boom period?
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